EXHBIT 10.5

**Standard Ground Handling Agreement**

****

**SIMPLIFIED PROCEDURE**

**Reg. No: JFK /LED B 1.2.**

**ANNEX B 1.2.** - Location(s), Agreed Services and Charges to the Standard Ground Handling Agreement
(SGHA) of January 2004

Between:

**Baltia Airlines, Inc.** 

  Having its principal office at: 

 63-25 Saunders St., Ste 7i , Rego Park , NY 11374 USA 

 hereinafter referred to as "the Carrier "

**ZAO "Cargo Terminal Pulkovo"** 

 Having its principal office at: 

  St. Petersburg 196210, Russia 

 Pulkovskoye shosse, 37, building 4, 

  hereinafter referred to as "the Handling Company"

Effective fro m :**01/06/2012** 

  This **ANNEX B 1.2.** 

  For the location: Pulkovo Airport, Saint-Petersburg

Is valid from **01/06/2012** till **31/05/2013** 

 and replaces : all previous Agreements. Appendixes and Annexes

PREAMBLE:

This **Annex B 1.2.**has been prepared in accordance with the simplified procedure,
whereby the Carrier and theHandling Company agree that the terms of the Main Agreement and
Annex A of SGHA of January 2004 as
published by the International Air Transport Association (IATA) shall apply as if such terms were repeated here
in full. By signing this **Annex B1.2.** the Parties confirm that
they are familiar with the aforementioned Main
Agreement and Annex A.

**PARAGRAPH 1 - HANDLING SERVICES AND CHARGES**

**1.1** The Handling Company shall provide the following services of Annex A at the following rates.

The rates are stated in USD and do not include VAT. VAT should be raised , ultimately, from the Carrier,
according to Russian Federation Legislation.

**1.2** No extra charges will be due over and above the charges as mentioned in sub-paragraphs 1.3 and 1.5, of
this**Annex B 1.2.** for providing these services at night, on Public Holidays.

**1.3 Cargo and mail Handling charges**

1.3 .1 The rate for general cargo handling shall be - according to the following table No. 1, per kg.:

Table No. 1 (Rates for General Cargo)

|Tonnage, Tons     | 1 ton | > 1 ton, 

  10 tons | >10 tons 

  20 tons | >20 tons,

  40 tons | >40 tons, 

  60 tons | >60 tons, 

  80 tons | 80
tons
|----------------- | ----- | -------------------- | -------------------- | -------------------- | --------------------- | --------------------- | -------
|Rate, USD per kg. | 0,21  | 0,19                 | 0,15                 | 0,14                 | 0,13                  | 0,12                  | 0,11   

1.3.2 The rate for mail handling shall be - according to the following table No. 2, per kg .:

Table No. 2 (Rates for mail)

|Tonnage, Tons     | 1 ton | >1 tons

 30 tons | >30 tons,

 50 tons | 50 tons
|----------------- | ----- | ----------------- | ------------------- | -------
|Rate, USD per kg. | 0,26  | 0,21              | 0,16                | 0,14   



1.3.3 The rate for special cargo handling shall be according to the following table No.3, per
kg .:

Table No. 3 (Rates for special cargo)

|Tonnage, Tons     | 0,1 ton | > 0,1 ton,
 1 tons | >1 tons

 5 tons | >5 tons,

 10 tons | 10 tons
|----------------- | ------- | ------------------ | ---------------- | ------------------ | -------
|Rate, USD per
kg. | 0,24    | 0,20               | 0,18             | 0,16               | 0,14   

1.3.4 The rate for handling of general cargo, mail, and special cargo is defined as follows,
depending on kind of the cargo:

At the end of each month, weight of cargo, mail, and special cargo is summarized separately
for this particular month.The rate for cargo, mail, and special cargo is applied corresponding
the tonnage for this particular month.

The cargo that has arrived to the terminal according to the Air Waybills (AWB) by ground
transport and then factually located on the warehouse determines by us as air cargo. So, the
weight of the cargo that is delivered by airline on trucks according to AWB will be
summarized with the total tonnage that was transported by the airline per month and will be
rated according to the Table No.1 and Table No.3 of this**Annex B 1.2.** (depending on the
cargo type whether it is general or special)

1.4 Charges for the cargo storage

General cargo is considered to be packed or piece cargo, which doesn't require special conditions and technology handling.
1..1 General cargo storage is free of charge within 3 (three) days. For outbound cargo (export) free storage period starts prior three days to the shipping date of cargo, as shown AWB. For inbound cargo (import) free storage period starts from the date of informing the cosignee about the cargo arrival.



Free storage is not applicable for cargo stored in refrigerating, isotope chambers live animals, and any special cargo as well.



In case of part delivery of shipments each part of shipment is considered to be a separate one.



1.4.2. The Cosignee pays storage of inbound cargo (import) from the date of informing of Cosignee by the Handling Company until the date of receiving and shipping the cargo from the Handling Company's warehouse, in accordance with the opened published tariffs, including terms and periods of free storage.
The Shipper pays storage of outbound cargo (export) from the date of accepting cargo by the Handling Company until the shipping date, as showed in the AWB, including terms and periods if free storage. Date shown on AWB must not be earlier that the date of acceptance of the documents by the export dispatcher of th Handling Company.



The Carrier pays the storage of outbound cargo (export) from the shipping date, as
showed in AWB until the date of actual shipping, in case the cargo was not shipped in
accordance with AWB shipping dates due to any reasons, except the failures of the Handling
Company, according the tariffs, pointed below.

General cargo- USD 0.10 per kg per day.

Cargo, which is stored in the refrigerating chamber (from 1st day of placement) - USD 0.15
per kg per day

Dangerous cargo (from 1st day of placement) - USD 0.20 per kg per day

Cargo, which is stored in the isotope chamber (from

1st day of placement) - USD 15.00 per cargo piece).

Valuable cargo (from 1st day of placement)- USD  0.15 per kg per day.

**1.5. Charges for Ramp Handling**

1.5.1. For a single ground handling consisting of the arrival and the subsequent departure at
agreed timings of the same aircraft, the Handling Company shall provide the following
services at the following rates.

The rates are stated in USD and do not include VAT. VAT is raised ultimately from the
Carrier, according to Russian Federation Legislation.

The rate for Ramp handling shall be charged per turnaround in accordance with the
following table N 4 :

**Table No.4:**

|**Aircraft type** | **Rate, USD**
|----------------- | -------------
|**B747**          | **259**      

1.5.2.  No charge for ramp handling is applied in case there is no mail and cargo on
turnaround flight.

1.5.3. Handling in case of technical landing for other than commercial purposes will be
charged at 50 % of the above rates, provided that a physical change of load is not involved.

**1.6. AGREED SERVICES, THAT IS PERFORMED BY THE HANDLING COMPANY**



**Section 1. Representation, Administration and** Supervision

**1.1. General**

1.1.3. Indicate that the Handling Company is acting as handling agent for the Carrier

**1.2 Administrative Functions**

1.2.4 Maintain the Carrier's manuals, circulars, etc. connected with the performance of
the services

Section 3. Ramp services

3.6 Loading and unloading

3.6.3 (a) Provide equipment for loading and/or unloading

3.6.5 (a) Provide equipment for transport and assembly of

 (2)Cargo

3.6.6 (a) Unload aircraft, returning lashing materials to the Carrier 

 (b) Load and secure Loads in the aircraft

3.6.7 Redistribute Loads in aircraft (in accordance with Carrier's instructions)

3.6.10 (a) Provide safeguarding of all Loads requiring special handling 

 (e.g. valuables) during 

 (1) loading / unloading 

  (2) transport between aircraft and designated point on the airport

Section 4. Load control, communications and flight operations

4.1 Load control 

 4.1.2 (a) Prepare airway bills and cargo manifests where: 

(2) Load Control is performed by the Carrier.

4.2 Communications

4.2.1 (a) Compile 

 (c) Perform EDI (electronic data interchange) transactions 

 (d) Inform the Carrier's representative of the contents of such messages

4.2.2 Maintain a message file containing all above mentioned messages pertaining to each
flight for a minimum of 90 ninety days

Section 5. Cargo and Mail Services

5.1 Cargo and Mail Handling - General

5.1.1 (a) Provide

 warehouse handling and storage facilities for 

 (1) General Cargo 

 (2) Special Shipments 

 (3) Specialised Cargo Products 

(c) Store Cargo 

 (d ) Take appropriate action to prevent theft of, or damage to cargo

5.1.2(a) Provide equipment for the handling of 

 (1) General Cargo 

 (2) Special Shipments 

 (3) Specialised Cargo Products

5.1.3 (a) Provide handling services for: 



 (1) General Cargo 

 (2) Special shipments 

 (3) Specialised Cargo Products 

 (5) Diplomatic Mail 

 (6) Diplomatic cargo

5.1.6 Take appropriate action to prevent theft or unauthorised use of, or damage to, the
Carrier's pallets , containers, nets, straps, tie-down rings and other material in the custody of
the Handling Company. Notify the Carrier immediately of any damage to or loss of such
items.

5.2 Customs control

5.2.3 Place cargo under Customs control for: 

 a) Inbound cargo 

 b) Outbound cargo

**5.3 Irregularities Handling**

5.3.2 Report to the Carrier any irregularities discovered in cargo handling

5.3.3 Handle lost, found and damaged cargo

**5.4 Document handling**

5.4.1 (b) Check all documents to ensure shipment may be carried.The check shall not
include the rates charged.

 (c) Obtain capacity/booking information for the Carrier's flight. 

 (d) Split air waybill. Forward applicable copies of manifest and air waybills to the Carrier .

 (e) Prepare cargo manifest(s ).

 (f) Provide the load control unit with Special Load Notification. 

 (g) When applicable return copy of air waybill to shipper, endorsed with flight details.

5.4.2 (a) Notify consignee or agent of arrival of shipments

 (b) Make available cargo documents to

 consignee or agent.

**5.5 Physical Handling Outbound/Inbound**

5.5.1 Accept cargo, ensuring that 

 b) manual labels are affixed and processed

 c) shipments are "ready for carriage"

 d) the weight and volume of the shipments are checked 

 e) the regulations for the carriage of special cargo, particularly the IATA Dangerous
Goods Regulations (DGR), IATA Live Animals Regulations (LAR) , and others have
been complied with.

5.5.2 Tally and assemble for dispatch cargo for the Carrier's flight

5.5.3 Prepare 

 (a) Bulk cargo 

 (b) ULDs 

 For delivery onto flights

5.5.4 Establish the weight of 

 (a) Bulk cargo 

 (b) built-up ULDs

and provide the load control unit with dead load weight

5.5.5 (a) Offload bulk cargo from aircraft 

 (b) Check incoming cargo against air waybills and manifests 

 (c) Break down ULDs

5.5.6 Release cargo to the consignee or agent

5.7 Post Office Mail

5.7.3 Deliver inbound mail to 

 (a) on airport postal facility together with Post Office mail documents, against receipt
from postal authorities

5.7.4 Pick outgoing mail from Postal Facility 

 (a) on airport

5.7.8 Establish the weight of 

 (a) Bulk mail 

 (b) Built-up ULD's and provide the load control unit with dead load weights

Section 6. Support services

6.3 Unit Load Device (ULD) Control

6.3.1 (a) Provide storage space for ULDs 

 (2) cargo ULDs

6.3.2 Take action to prevent damage, theft or unauthorised use of the Carrier's ULDs
in the custody of the Handling Company. Notify the Carrier immediately of any damage
or loss.

6.3.3 (a) Take physical inventory of ULD stock and maintain records

(b) Compile and dispatch ULD control messages

6.3.4 Prepare ULD exchange control documentation for all transfers of ULDs and
obtain signature(s) of the transferring and receiving carrier(s) or approved third parties
and distribute copies of such kind of documents.

6.3.5 Handle lost, found and damaged ULDs and notify the Carrier of such
irregularities

6.7 Surface Transport

6.7.1 (a) Provide the transport of

(3) cargo and/or mail

(4) empty ULDs between

(c) separate terminals at the same airport



**PARAGRAPH** 2 -**ADDITIONAL SERVICES AND CHARGES**

**2.1. Charges for the ULD handling and storage**

2.1.1 ULD's storage - USD 1.80 per unit per day.



2.1.2. Deliver empty ULDs between container area of luggage department of Airport
Pulkovo and container area of Handling Company , and vice versa, shall be charged USD
 5.00/ULD per unit.

**2.2. Unclaimed Cargo**

Cargo, which was not received and taken by the Consignee after the 2 month of storage
from the Handling Company, counting from the moment of informing the consignee - is
considered to be unclaimed cargo. The Handling Company informs the Carrier about
unclaimed cargo in accordance with IRP telexes procedures.

The Carrier is obliged to clear storehouses of the Handling Company from the unclaimed
cargo and to pay for full period of storage keeping, as well as other compensations,
expenses, penalties non- delivery oriented.

The payment of cargo storage within 2 (two) months is counted according to the tariffs,
mentioned in paragraph 1.4.2.After the expiry of 2 months the charge for undelivered
import cargo storage is USD 0.80 per**1** kg per day (for all category of cargo ).

**2.3 Charges for the Service Cargo**

Cargo is considered to be a service one if it belongs to the Carrie r , is addressed to the
Carrier or the representative of the Carrier.Among the service cargo are retail materials of
airline, aircraft spares, special packing materials, catering items, blanks and forms, personal
effects of airline stuff.

There is no charge for the storage of outbound (export) service cargo prior 3 days counting
from the date of shipping, showed in AWB.There's no charge for the storage of
inbound (import) service cargo during 3 (three) days, counting from the date of placement
to the storehouses of the Handling company.

Storage of Carrier's outbound/inbound service cargo in USD 0.08 per kg starting from the
4th day.

**2.4.** All services not included in Paragraph 1 and mentioned above in Paragraph 2 of this**Annex B 1.3.** shall be charged to the Carrier by the Handling Company at rates which are
acting at the moment when actual services had been provided by the Handling Company ,
with the prior consent of the Carrier.

**PARAGRAPH 3- DISBURSEMENTS**

Any disbursements made by the Handling Company on behalf of the Carrier shall be
reimbursed by the Carrier at cost price plus an accounting surcharge of  10 (ten)%. The disbursements
amount will be stated in the below monthly invoices.



**PARAGRAPH 4- LIMIT OF LIABILITY**

Notwithstanding Sub-Article 8.1. ( c) of the Main Agreement and in addition to Article 8.5
thereof, the Handling Company shall indemnify the Carrier against direct loss of or damage
to the Carrier's cargo (excluding Mail) caused by the negligent act or omission by or on
behalf of the Handling Company in the provision of the services and/or the supply of goods
under this**Annex B 1.2.,** PROVIDED ALWAYS THAT the Handling Company's liability shall
be limited to 17 SDR per kilo or to the actual compensation paid out by the Carrier,
whichever is less. In any event, the total amount of the claim shall not exceed USD
1,000,000, except that loss or damage in respect of any claim below USD500 shall not be
indemnified. For the avoidance of doubt, the liability of the Handling Company shall never
exceed the liability of the Carrier.



For the avoidance of doubt this Paragraph does not affect or prejudice the generality of the
provisions of Sub-Article 8.1. of the Main Agreement



**PARAGRAPH 5- SETTLEMENTS**

Notwithstanding Sub-Article 7.2 of the Main Agreement, settlement of account shall be
effected as follows:

5.1. Calculations for the provided services would be made in accordance with data, stated
in the cargo  documentation (AWB, cargo manifest, mail manifest)

5.2 The Handling company shall invoice the Carrier before the 10th day of the next
month.

5.3 All invoices shall be expressed in USD and will be paid in USD or RUR in accordance
with the Central Bank of Russian Federation exchange rate on the day of invoice issuing.

5.4. The payment term is 30 (thirty) calendar days
from the date of invoice.

5.5 Bank commission rates and post office fees
should be paid by the Carrier.

5.6 The handling tariffs set out in Paragraph 1,
charges applicable under Paragraph 2 of this
**Annex B 1.2.**, as well as prices declared in price list do not include the valu added tax (VAT). VAT
should be borne ultimately b the Carrier, according
to RF legislation.

5.7. In case of overdue payments, the Handling
Company has the right to impose a penalty at a rate
of 0.1 {zero point one)% of the outstanding amount
per each day of delay, or to suspend servicing of the
Carrier. Payment by the Carrier of the penalty shall
not decrease the amount of the Carrier's pecuniary
obligation under the Agreement.

5.8 The Carrier shall remit the amount of the invoice
to the Handling Company's account.

5.9 Payment can be made by Representation of the
Carrier in St.Petersburg, authorized for such
payments on behalf of the Carrier.

5.10 Party's Banking Details:

The Handling Company:
ZAO "Cargo Terminal Pulkovo"
Principal office address: Pulkovskoye sh. 37/4, St.
Petersburg 196210, Russia
Mailing address: Pulkovskoye sh. 3714, St.
Petersburg, 196210, Russia
IDN 7810129213 KPP 781001001
Settlement account in Rubles:

Account: 40702 810 717 ODD 003 322
PC BANK "SAINT-PETERSBURG"
lnvestrbank subsidary
"OKTIABRSKIY "branch
Carr. ace. 30101 810 900 000 000 790,
BIG 044 030 790
Currency settlement account in US Dollars:
SWIFT: JSBSRU2P
PC BANK "SAINT-PETERSBURG"
lnvestrbank branch
"Oktiabrskoje"devision
Account N: 40702 840 817 000 203 332
E-mail: liudmila.rybakova@pulkovo-cargo.ru
Tel. +7 812 380 69 49

The Carrier

Baltia Airlines, Inc.
Principal office address: 63-25 Saunders St., Ste 7i ,
Rego Park, NY 11374 USA
Mailing address: 95-01 63rd Drive, Rego park, NY,
11374 .

ABA routing 021001088
phone:718-244-8880
E-mail: victoria.cape@baltia.com
Settlement account in US Dollars:
Account: 689700121
HSBC Bank
95-01 63rd Drive, Rego park, NY 11374
ABA routing 021001088

**PARAGRAPH 6- NOTIFICATION**

In accordance Sub-Article 11.3 of the Main
Agreement, any notice or communication to be
given hereunder shall be addressed to the
respective parties as follows:**Handling Company**
ZAO "Cargo Terminal Pulkovo"
Pulkovskoye shosse, 37/4,
St. Petersburg 196210, Russia
tel.: +7 812 380 69 00, fax:+ 7 812 380 69 02
tel: + 7 812 380 69 44
e-mail: christian.sandona@pulkovo-carqo.ru
e-mail: alena.khilkova@pulkovo-cargo.ru
SIT A: LEDFFXH

**The Carrier
(Head office)**
Baltia Airlines, Inc.
Principal office address: 63-25 Saunders St., Ste 7i ,
Rego Park, NY 11374 USA
Mailing address: 95-01 63rd Drive, Rego park, NY,
11374
ABA routing 021001088
tel: 718-244- 8880, 1-718-275-2300
fax: 1-718-896-7971

PARAGRAPH 7- GOVERNING LAWS

The parties shall undertake all actions to attempt a
settlement of the disputes and contradictions
emerged across the agreement negotiating.
This agreement shall be governed by and
interpreted in accordance with the laws of RF.
Notwithstanding with Article 9 of Main Agreement
arbitration shall be conducted in the Arbitration
Court of Saint-Petersburg and Saint-Petersburg
region.

PARAGRAPH 8- OTHER TERMS AND
CONDITIONS

8.1 The parties shall undertake to inform each other
in writing of any changes in their address or banking
details within 10 (ten) days. Any changes or other
communications to be transferred from one party to
the other party shall be transferred in writing form.

8.2 Notwithstanding Article 11 of the Main
Agreement the following will apply:
In case of considerable changes in handling
procedures and/or information technology
specifications, and if parties cannot agree on
implementing or correcting such situation within 60
(sixty) days, parties are entitled to unilaterally cancel
this **Annex B 1.3.** without prejudice to any other
rights.

8.3 The Annex is made in Russian and English, with
one original for each Party. In the event of any
ambiguity, however, the English language shall
prevail.

8.4 This**Annex B 1.3.**shall be effective from
**01/06/2012 till 31/05/2013**. In a part of settlements before
fulfillment by the parties the obligation under
the Annex B 1.2 It shall supersede any previous
arrangements between the Parties governing the
provision of services at locations for which is valid
this Annex B 1.2.

8.5 Both Parties shall be exempt from their
obligations if prompt notification is given by either
Party in respect of any failure to perform its
obligations under this **Annexe B 1.3**. arising from a
force majeure event or any other cause beyond the
reasonable control of either Party.

PARAGRAPH 9- CONFIDENTIALITY

9.1. Each Party hereto expressly agrees that all
information, documents and/or data, commercial or
otherwise, furnished by the other Party shall be kept
confidential and be used solely for the performance
of this Annex B 1.3. and shall not be disclosed to
any third party without the other Party's prior written
consent and that no reproduction of such
information, documents and/or data shall be made
except for 1) the internal use of the Party to whom
such information, documents and/or data are
furnished and 2) except for legal and tax purposes.
In particular, the Handling Company agrees to
ensure that all its staff respect the confidentiality of
all security measures and received information,
including that contained in the security training
documents, which remain the property of the
Carrier.

9.2 The Handling Company agrees to take all
necessary action to ensure compliance with these
obligations by its subcontractors, if applicable.

9.3 The confidentiality commitments defined in this
Sub-paragraph shall remain in full force and effect
throughout the term of this **Annex B 1.3.**, and five
(5) years after its termination or expiry.

PARAGRAPH 10- PARTIES ENDORSEMENT
Signed for and on behalf of

ZAO Cargo Terminal Pulkovo

 /signed/
Christian Sandona            /seal/
Director  
Rybakova L.I.
Financial Director~ Chief Accountant

Signed on behalf of the Carrier
/signed/
Dmitrowsky, I.
Chief Executive Officer